Monday, 28 January 2013

Ryanair reports Q3 profit up 21% to €18 million ©

                                                     
Ryanair announced Q3 profits of €18 million up 21% on revenues of €969 million up 15%, despite an 24% increase in fuel costs to €81 million increase, carrying 17.3 million passengers up 3% it's average fares improved by 8% and ancillary revenue grew by 21% to €220.1 million far exceeding passenger growth.

Ryanair’s CEO Michael O’Leary said "Our Q3 profit of €18m was ahead of expectations due to strong pre-Christmas bookings at higher yields.  The 8% rise in avg. fares reflects our improved customer service, record punctuality and the successful roll out of our reserved seating service.  Our fuel costs rose €81m, (+24%), slightly less than expected as oil prices increased 22% (from $84pbl) to $102pbl.

Excluding fuel, Q3 unit costs rose 4% due to excessive increases in Italian ATC costs, Spanish airport charges, and the strength of Sterling to the Euro.  Ancillary revenue performed strongly and rose 24% to approx €13 per pax."

The carrier remains well placed to take further advantage of opportunities presented by on-going consolidation in Europe stating "Significant capacity cuts by Legacy and other struggling EU carriers continue to offer us substantial growth opportunities across Europe, We expect further capacity cuts and restructurings in Europe as high fare, loss making carriers struggle to compete with Ryanair’s expansion at low prices. These trends will create more growth opportunities for Ryanair to grow profitably to 120m passengers over the next decade. "

The carrier continues to grow its cost/pricing differential stating "Ryanair’s ex fuel passenger cost of €27 (ytd) is lower than any carrier in Europe.  Our average fare of €50 is (by some distance) lower than any other EU carrier. The combination of Ryanair’s industry leading costs and customer service, strong cash flows and balance sheet, gives Ryanair a unique platform to deliver its next decade of growth as we target a 20% share of the EU short-haul market by growing to over 120m pax p.a. ".

Looking ahead to Q4 it expects traffic will drop by approx.400,000 passengers (-3%)below last year’s Q4, due to the parking of up to 80 aircraft which limits the impact of high oil prices, high airport fees at Stansted and Dublin, and seasonally weaker Q4 demand.

The carrier has raised its Full Year guidance expecting full year profits to exceed it's previous guidance of €490m to €520m and rise close to €540m, a 7% increase on last year’s profits despite a 19% increase in fuel costs.

Irish Aviation Research Institute © 28th January 2013 All Rights Reserved.